Wednesday, May 4, 2016

Who will be the Real Estate Regulatory Authority (RERA)?:

The much awaited and widely acclaimed Real Estate (Regulation and Development) Act, 2016 came into force from May 1, 2016. This has set in motion the process of making necessary operational rules and creation of institutional infrastructure for protecting the interests of consumers and promoting the growth of real estate sector in an environment of trust, confidence, credible transactions and efficient and time bound execution of projects.

Ministry of Housing & Urban Poverty Alleviation has notified 69 of the total 92 sections of the Act on Wednesday this week bringing the Act into force from May 1,2016 culminating the eight year long efforts in this regard. A proposal for a law for Real Estate was first mooted at the National Conference of Housing Ministers of States and Union Territories in January, 2009.

As per the notification announcing the commencement of the Act on May 1,2016, Rules under the Act have to be formulated by the Central and State Governments within a maximum period of six months i.e by October 31,2016 under Section 84 of the Act. Ministry of HUPA would make Rules for Union Territories without legislatures while the Ministry of Urban Development would do so for Delhi.

Section 84 of the Act stipulates that “The appropriate Government shall, within a period of six months of the commencement of this Act, by notification, make rules for carrying out the provisions of this Act.”

Early setting up of Real Estate Regulatory Authorities with whom all real estate projects have to be registered and Appellate Tribunals for adjudication of disputes is the key for providing early relief and protection to the large number of buyers of properties.

Section 20 of the Act says “The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification establish an authority to be known as the Real Estate Regulatory Authority to exercise the powers conferred on it and to perform the functions assigned to it under this Act”. These Authorities decide on the complaints of buyers and developers in 60 days time.

Section 20 of this Act also empowers appropriate Governments to designate any officer preferably Secretary of the Department dealing with Housing, as the interim Regulatory Authority until the establishment of Regulatory Authority under the provisions of the Act.

Regulatory Authorities, upon their constitution get three months time to formulate regulations concerning their day to day functioning under Section 85 of the Act.

Likewise, under Section 43 of the Act, Real Estate Appellate Tribunals shall be formed within a maximum period of one year i.e by April 30,2017. These fast track Tribunals shall decide on the disputes over the orders of Regulatory Authorities in 60 days time.

Under the directions of the Minister of Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu, a Committee chaired by Secretary (HUPA) has already commenced work on formulation of Model Rules under the Act for the benefit of States and UTs so that they could come out with Rules in quick time besides ensuring uniformity across the country. The Ministry will also will come out with Model Regulations for Regulatory Authorities to save on time.

The time limits of six months for formulation of Rules and one year for setting up Regulatory Authorities and Appellate Tribunals are the outer limit and the States willing to act quickly could do so and the Ministry of Housing & Urban Poverty Alleviation would notify the remaining Sections of the Act to enable relief to the buyers under the Act as quickly as possible, as desired by Shri M.Venkaiah Naidu.

The remaining 22 Sections to be notified relate to functions and duties of promoters, rights and duties of allottees, prior registration of real estate projects with Real Estate Regulatory Authorities, recovery of interest on penalties, enforcement of orders, offences, penalties and adjudication, taking cognizance of offences etc. -Click to read more - Press Information Bureau

If you want my advice, feel free to call me on 919860044110. First 3 minutes are free! And for more than 3 minutes - pay as you wish - you decide the value of my advice.

Of course, for a serious discussion, better fix an appointment at a time convenient to both of us. So that we can have uninterrupted & in depth discussion on my mobile (919860044110)
- on Video Hangout on Google+
- or on Skype (ravikarandeekar) .

For more than 3 minutes and up to 30 minutes - pay as you wish. After the conversation - transfer the money to my bank account. As much as you wish. From a few hundred to a few hundred thousand crore of U S Dollars or Indian Rupees. Here are my bank account details:

4 comments:

Ravi, TheMonk, question to you.I was discussing the reduction of black money flow in the RE business with a friend of mine who is associated with RE. He mentioned that though the flow of black money investment in RE has reduced, the middle officers that the builders have to deal with to start on a project still havent stopped demanding chiri-miri. So, will RERA ensure that the corruption related to RE will be stopped/controlled/reduced at all levels, so that builders could possibly work within the set rules without having to pay chiri-miri, and possbily pass on the benefits to the buyers in terms of reduced prices? No doubts RERA will ensure that the buyer is not duped, but can it be instrumental in bringing down the cost of flats?

First, RERA & MBBL will certainly clamp down on corruption.Second, large section of builders themselves don't want corruption to end simply because their business mostly runs on this very corrupt money. We already know about lot of builders in Pune who are just fronts of politicians.

Reduction in corruption means reduction in these type of builders ! So we should welcome reduction of black money in real estate. With ED, IT going behind benaami properties, many people are now running away from RE.

It was this black money which helped builders to sustain even when there was no demand. With this money out, builders will be forced to price according to market dynamics which means fall in prices.

This is good for those who want to be ethical, customer oriented builders & the buyers.

In short, rogue elements will be reduced, if not completely eliminated & transparency will increase.

Building ground for transparency :

If only the New Model Building Bylaws (MBBL) announced by the Union Urban Development Minister M Venkaiah Naidu is followed in letter and spirit, it will reduce the human interface and provide a structural framework to create an online single-window system, thereby reducing corruption as well.

One should simply wait till end of 2017 which will be the time when entire set-up of RERA will be ready. Better save money today, & buy later ready possession flat with all approvals at discounted rate. Thus you have RERA, financial savings & peace of mind.

First things first, there is no shortage of land supply in India. Ajay Shah of the National Institute of Public Finance & Policy, in a now famous argument, made it clear that at an FSI (Floor Space Index) of 1, India’s entire population may be housed and placed in office/factory spaces and that would still use up only 1 percent of the total land area of the country. Imagine if we moved to FSI of 2, that area would double.

Some very rich people I knew, are not so rich anymore because they have liquidated their capital market portfolios and taken huge bank loans to buy properties that are worth more than their entire net worth. So they now no longer have portfolios. They have a house. And a job – to pay for the maintenance and other bills.

If you are buying real estate, stop to think once – do you need it, is it aspirational or are you just suffering from a need for excesses – of status, power and more.